Essar Steel is paying its bills again and seeking new capital, so the Dayton Administration is pulling back on its threat to force the Iron Range firm to immediately repay a $66 million state loan.
Essar is building a $1.9 billion taconite production facility in Nashwauk, Minn. The state loan paid for infrastructure improvements around the site.
Last week, however, Dayton told Essar CEO Madhu Vuppuluri the state would call its loan unless Essar paid all of its Minnesota contractors and other vendors, setting Wednesday as a deadline. The day came and went.
On Friday, Dayton spokesperson Matt Swenson released a statement saying that official confirmed Essar "had paid, in full, $20 million in outstanding obligations to its vendors," meeting the governor's demands.
"Dayton was satisfied with the company's actions and assurances, and will not call for the immediate repayment of the state's loan," Swenson, adding the governor "is also sympathetic to the concerns of some vendors, who have expressed that more strident demands at this time could jeopardize the future of the project, and limit the company's ability to make timely payments on any outstanding and future obligations."
The statement also said an international bank was working now with Essar on a plan for additional capital to "help assure the completion of the project, with timely payment of its contractors and vendors moving forward."